How do you treat the expenses of writing a book. Do we put it on schedule E where we put the royalties? I have never dealt with this before.

Forum|Forum|6 years ago
March 21, 2020
5 replies
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Best answer by Randy Haynes

You will need to set up a Schedule C for the author to record any expenses. You will then link the 1099-MISC royalties to the Schedule C by clicking in the Schedule C box on the 1099-MISC worksheet.

abctax55

Level 15

I put them on Schedule C.

IF there's a F 1099 showing them as *royalties* , I also run them in/out so the IRS can do their matchy matchy thing.

HumanKind... Be Both

BobKamman

Level 15

I think a phantom Schedule E like that will increase the chances of an audit:

1) Higher positive income before deductions.

2) Schedule E expenses extraordinarily high compared to revenue.

Hundreds of publishers issue thousands of 1099s to authors or their agents, showing royalty income in Box 2. Has anyone ever seen a CP-2000 asking for a Schedule E, when it's reported on Schedule C? What writers do, is write. I think if it happened, someone would have written about it.

I would think twice about preparing an extra form (do you charge for it?) without advising the client that it might inspire more questions from IRS, than it prevents.

qbteachmt

Level 15

"What writers do, is write."

But first, they travel the world, taking all the cost as expense, without any income, while it takes them 3-10 years to get that book to the publisher.

This question is a bit vague. It could be work in progress, not Expense. The timing matters.

Don't yell at us; we're volunteers

IRonMaN

Level 15

Sounds like they and the royalties might belong on schedule C.

Slava Ukraini!

R

Randy HaynesAnswer

Level 4

You will need to set up a Schedule C for the author to record any expenses. You will then link the 1099-MISC royalties to the Schedule C by clicking in the Schedule C box on the 1099-MISC worksheet.

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